Although property taxes provide funding for various local government projects, they can burden the average American. The COVID-19 pandemic affected the economic well-being of many individuals.
Unprecedented job losses and other factors served to increase the challenge of property tax payment. Everyone from business owners who own commercial properties to homeowners was affected.
The local government generally handles property taxes, and many regions have created programs to relieve the burden of property tax which many property owners bear.
If you’re wondering how property taxes work and would like to know if you’re eligible for any tax reliefs, read on to find out more.
Understanding property taxes
Property taxes are calculated based on the assessed value of the property you own, usually real estate. Property tax is based on the region where the property’s located. Many states conduct property assessments each year, but the interval between assessments could be longer in other areas.
A property assessor will take note of a home’s market value, trends in the real estate market, as well as additional factors like improvements to the property or other fixtures on the land. These factors will create an estimate of your home’s worth and, subsequently, your tax rate.
The local government in each jurisdiction handles the regulation and management of property tax.
What is property tax relief?
Property tax relief is also known as tax exemption. It is an avenue for eligible and qualified property owners to reduce their tax liability or obligations. Tax-exempt status may mean a reduction in taxes or a total tax relief.
However, the length of the exemption ultimately depends on your situation, location, and reason for applying.
Although the process of receiving tax relief varies from state to state, eligibility is usually accorded to the following group of people:
- Widow or widowers
- The disabled
- Low-income residents
- Minors whose parents are deceased
- Senior citizens
However, for business property taxpayers, the inclusion of energy-efficient fixtures, agricultural activities, air-pollution facilities, and other industrial purpose-buildings may qualify you for tax exemptions. Non-profit organizations also receive tax exemptions.
Tips for applying for property tax relief
· Do your research
Different states have varying guidelines for the application process. Many local governments provide this information on their websites, but you could also visit your local tax office.
· Complete the application
After going through the eligibility requirements and the necessary documentation, fill the application and submit the required documents. Take note of the deadline and ensure that you complete the application within that window.
With the visible decline in businesses and rising costs in many sectors, it is pretty apparent that the government would attempt to offset this financial burden through tax levies. This increase in tax rate will heavily impact homeowners and possibly cripple new businesses.
It is necessary to create a property tax planning strategy to combat the effects of COVID. An excellent way to do this is to hire the service of a property tax reduction expert and also consider the option of property tax relief.